In this article, we will describe the regulation of private M&A transactions in Sweden. One of the key features of M&A transactions involving private companies, enterprises, or assets in this jurisdiction is contractual freedom which allows parties to provide for the terms and conditions that will govern the relationship. However, it should be always kept in mind that this freedom is subject to the requirements of good faith and fair dealing.
The popular option is a transaction structured as a sale of shares, as this format gives the parties more flexibility than buying a business in Sweden as a whole property complex.
Starting a business in Sweden as a foreigner
This year, experts note the intensification of foreign investors in Sweden
planning to expand business by acquiring affordable competitors or diversifying investments in various industries.
Foreign nationals are allowed to register such forms of ownership in Sweden as the limited liability company (Privat Actiebolag) and the public limited company (Publikt Aktiebolag). All other types of enterprises are allowed to be established only in partnership with a resident of the country. In this case, the company is registered on it, and you are the holder of a certain number of shares.
A private company can be managed individually, while a joint-stock company must be managed by at least three directors. In this case, one of the directors must be a Swedish citizen if:
- the company employs more than 30 people;
- the company's authorized capital is more than 1 million kroons (more than 110,300 USD).
A director of a private enterprise can be a citizen of any country who has reached the age of majority without a criminal record. To be able to run a company, he will need a special work permit in Sweden. This document is issued in the national register (Patentoch Registreringsvercet).
Legal framework for the acquisition of private companies in Sweden
Foreign law can be applied when concluding an M&A transaction in Sweden but the parties must ensure compliance with mandatory Swedish law to the extent that it applies to the transfer of shares.
Sweden's law on the sale of goods applies to all assets, including shares, but excluding real estate. However, this law is not mandatory and, therefore, quite often it is not taken into account in private mergers and acquisitions.
Many additional legal principles apply to the process of transferring personnel and certain assets, such as intellectual property rights and personal data, to a new company. This is treated with great care in Sweden.
Company acquisition in Sweden is likely to entail significant corporate changes. It is possible that the charter will be changed and the board of directors will also be different. In such cases, it is necessary to get registered with the regulatory authorities and pay a registration fee.
If you need legal advice when concluding an M&A transaction in Sweden, our company's seasoned professionals are at your service. We will answer all your questions during an individual consultation, which you can sign up by filling out the feedback form on the website.